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ISCOVER
Staff Reporter
The endless cuts to fixed rates seems to be paying ends for Australia's lenders, as demand for fixed rate home loans hit its highest level in over three years.
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According to new data from Mortgage Choice, demand for fixed rate loans doubled over the past year, peaking at 20 per cent of all new loan approvals in November.
Mortgage Choice spokesperson Belinda Williamson said when comparing the company's November loan approval data to one year ago, it is evident fixed rate loans have become far more popular.
"There has been a lot of rate movement in fixed rate loans in recent weeks and months. We've seen some fixed rate loan products almost a whole percentage point lower than lenders' variable rates," she said.
"Demand for ongoing discount loans has risen steadily, with this type of loan representing 45 per cent of all home loans in November, compared with 43 per cent six months ago and 33 per cent a year earlier.
"Snapping up relatively low fixed rates and attractive variable rate discounts, borrowers are certainly making the most of lenders' pricing war as they battle each other for business."
Variable rate home loans accounted for 80 per cent of all loan approvals this month, on par with the previous month and lower than the 12-month average of 86 per cent.
Standard variable loan demand rose to 17 per cent of approvals in November from 15 per cent in October, below the 12-month average of 24 per cent. Demand for basic variable loans fell to 14 per cent in November from 16 per cent in October, down on the 12-month average of 21 per cent.
